Thomson rejects latest bid

Thomson said it had turned down the new offer of £1.45bn, which values Thomson at 145p a share, following its rejection of a £1.3bn approach last week.

C&N's increased offer was conditional on the Thomson board recommending the deal to shareholders.

But Thomson said the price 'would not reflect the value of the business and its prospects'.

'Accordingly if such an offer were to be made the board would unanimously recommend shareholders to reject it,' the company said in a statement.

Thomson said the potential offer was too low in light of plans to cut costs by at least £50m a year. It also pointed to its plans to improve its margins and invest in new technology.

Founded by media tycoon Lord Thomson in 1965, Thomson also owns travel agents Lunn Poly and its holiday brands include Portland Direct, Crystal Holidays and the Magic Group.

A takeover by C&N would see almost half the UK holiday business run by German companies.

Thomson holds around 24% of the market, while Thomas Cook, which has a 22% share, is largely owned by German company Preussag.

While C&N's latest proposal is a marked increase on its first offer, 145p a share would still leave shareholders in Thomson out of pocket. The company floated on the stock market in 1998 issuing shares at 170p each.

The price has slumped after the group's disappointing trading performance and shares closed yesterday at 128p. Thomson's profits before tax and one-off costs in 1999 were £77m, down 38% on the previous year's £124.4m.